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BREAK-EVEN
PURCHASE PRICES FOR FEEDER PIGS
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Table 6, break-even purchase prices are calculated for 55
lb. and 10 lb. feeder pigs using costsshown in Table 1. |
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Table
6. Break-Even Feeder Pig Prices.
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Feeder Pig Weaned
Pig
Item (55
lbs.)
(10
lbs.)
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| 1.
Hog revenue |
$0.40price
x250lbs. = |
$100
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$100
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2.a. Death loss |
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1
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2
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2.b. Feed costs |
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34
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46
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2.c. Operating costs |
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6
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9
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| 2.
Variable costs (sum of 2.a.,2.b., and 2.c.) |
$41
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$57
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| 3.
Break-even price to cover variable costs |
$59
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$43
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(line 1 - line 2) |
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| 4.
Investment and labor costs |
$10
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$14
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| 5.
Break-even price |
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$49
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$28
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(line 3 - line 4) |
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| The
table contains two break-even prices: |
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| 1.
Break-even price to cover variable costs (line 4). This
break-even subtracts feed and operating costs from projected
hog revenue. Feed and operating costs will not be incurred
if a feeder pig is not purchased. Purchasing hogs
for less than this price will contribute to covering investment
and labor costs. |
| 2.
Break-even price (line 5). This break-even price subtracts
all costs from projected hog revenue. In the long-run, feeder
pigs must be purchased for less than the break-even prices
if an operation is to be profitable. |
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| Break-even
prices for different hog and feed prices are shown in Tables
7 and 8. |
